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Closing Bell With Maria Bartiromo

News/Business. Maria Bartiromo. Analysis of the day's winners and losers in the stock market. New.

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Us 13, Obama 8, Kayla 5, S&p 5, Costco 4, Ncr 4, New York 4, Scott 4, Washington 3, Sandy 3, Dallas 3, Texas 3, Michelle 3, Mason 3, Groupon 3, Carl 2, Katherine 2, Andrew Mason 2, Nick 2, Geico 2,
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  CNBC    Closing Bell With Maria Bartiromo    News/Business. Maria Bartiromo. Analysis of the  
   day's winners and losers in the stock market. New.  

    November 28, 2012
    4:00 - 5:00pm EST  

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dow jones industrial average is looking at a gain of about 107 points. again, the last time we had a down day on the dow of 100 then and up day in the same session was back in october of 2011. more than one year ago. the second hour of "the bell" beginning right now with myself and michelle caruso-cabrera. welcome to "the closing bell." i'm michelle caruso-cabrera. scott will join us in a second. maria is back tomorrow. a reversal of fortune on wall street as stocks trade on fiscal cliff comments from president obama and john boehner. here's how we finished the day on wall street, near the highs. up 105 points. 12,983. we'll have technicians looking at this day, seeing if it's a key reversal. the s&p also in positive territory. market driven by headlines and
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bluster out of washington. yep, that's what investors should expect short term. maybe until january 1st. should they also expect a rally any time soon? according to ryan dieterich, rally could most definitely be headed our way. >> he joins us now to explain along with peter anderson from congress asset management company. bill mcvail from turner investment partners and our very own rick santelli. peter, i have to begin with you. with a name like congress asset management, is congress going to come through for your assets? >> well, i wish i had an inside scoop on that, but unfortunately, we're also left to speculate at this point. but i will say this. what's incredible about this market is the way the market moved up today, it's an instant polling network that the government can use, actually, to kind of float trial balloons to us and get a sense of what we think of their proposed actions.
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>> peter, that is so charming. you assume this government cares what you think. >> well, i like to think that. i do think that they are paying attention to the markets, even though they say they don't. it is a great feedback mechanism for them. i think that by january 1st we'll have so much more clarity that even the thought of having that kind of clarity will definitely push the markets in a positive direction. >> rick santelli, does this white house care about what the markets think, do you think? >> no, i don't think so. if the market had 800 or 900-point moves, maybe they'd care more. just to give you an example, this isn't really related, but the volcker rule was supposed to be done by the end of this year. they're going to delay it now until the end of the next quarter. in two weeks, we're going to celebrate the second anniversary of the passing of dodd frank.
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they can't even get one aspect of a bill passed two years ago and we think we're going to delve into any type of serious reform on the tax or entitlement side or even a framework by christmas. oh, yeah. i guess i'm the tooth fairy. >> bill, so what do you do here with no fiscal cliff deal yet, with whispers of possibly the fed stimulating the economy even further, and with economic data pouring in almost daily that suggests we're still sputtering along? >> well, i tend to think 2013s going to be a great year. i'm not just looking at housing and employment. i'm looking at the architectural building index. there's stuff in the draw room. they're ready to bid out this winter and break ground in the spring. the republicans know that. the democrats know that. i would agree with rick. right now it's hard to imagine they can come up with something. we know they can. we know the democrats can say, okay, we'll give you something
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on means testing entitlements and we'll move the social security age up. republicans will say, we'll get rid of second mortgage deductions. they can do it. i don't think they really want to do it yet. so we just sit here sort of up 100, down 100. you know, just stand on the sidelines and wait until they figure it out. >> ryan, how are you allocating capital as we watch these gyrations on a daily basis because of comments out of capitol hill? >> the bottom line, we're still bullish. we think we can have a good year and rally. there are two reasons. overall sentiment. we follow options closely. we recently had huge put on individual equities. also, look at the individual sentiment polls. the aai, ten-week moving average is the highest since last october. a lot of fear. look at seasonality. we all know december is strong, about 2%. eight of the last nine years, the s&p from black friday to the end of the year is higher every single time, eight out of nine, and the average is up, you know,
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around 5%. last year we were up about 8.5% from that time frame. you know, mark twain says history doesn't repeat. >> got it. got it. okay. >> rick, let me ask you before we go, if you get any sort of semblance of a framework that something is going to happen between now and the end of the year, say by christmas, as the president said he wanted to have happen today, what happens to the interest rates? >> oh, there's no doubt in my mind that any kind of a solution is going to give us a strong rally in stocks. it depresses me a bit, actually, scott. i don't even think it needs to be a good deal. just any deal, and then that leaves us with the notion of how to tackle economic growth beyond the fiscal cliff. that's where it really starts to get interesting. >> i agree. i dweguess the market would ral so much before it even got to the details. >> that's the irony. it really would. >> it's all about sentiment.
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it's about two sides acting like adults saying, let's do this together. it's what the people want. >> i'm in. let's leave it there, guys. all right, gentlemen. thank you so much for weighing in. >> all right. let's get a quick round up of today's winners and losers now. kayla has been busy over the last hour. she joins us to wrap up the action. >> scott, i'm wearing my sneakers today, running between desks. you saw the markets as they ended on the highs of the day after that positive wall stre j. of course, following the bullish comments from president obama. not all stocks ended the day in the green. let's look at the laggards on the s&p. you have a lot of names that aren't really a surprise to be there. avon, r.r. donnelly. those are your top five losers on the s&p. it you look at the flip side, you have a lot of consumer names. the costcos, jcpenneys and coaches as well. finally, i want to take a look at the banking index. that ended on the highs of the day along with the overall
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market. we should watch for paul volcker tomorrow on some news potentially about how that regulation is actually going to shape up today. >> thank you, kayla. all right. groupon a big winner today, up 11%. the report says the board is looking to replace the ceo, andrew mason. today, mason spoke out about that report. it was interesting to say the least. julia boorstin has the details. >> that's right. interesting to say the least. ahead of a board meeting tomorrow, groupon ceo andrew mason took the stage at the business insider ignition conference to give a frank assessment of his job performance. here's what he had to say. >> here's a news flash. our stock is down about 80% since we ipoed a year ago. it would be weird if the board wasn't discussing whether i'm the right guy to do the job. we're experiencing that volatility now as we predicted when we did the ipo a year ago. if i ever thought that i wasn't the right guy for the job, i'd
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be the first person to fire myself. >> and mason would have to fire himself, as long as he maintains the support of follow board members, the three of them together control 55% of groupon's voting shares. his comments did help lift the stock 7.5% today after a start to move higher on the reports that the board is talking about ousting him, which first came out yesterday after the bell. mason did acknowledge groupon's challenges like a slowdown in europe. he defended how well groupon works for small businesses, saying the press focuses too much on the handful of crashes rather than groupon's many regular smooth landings. michelle. >> all right. thank you very much, julia. want to tell you about disney, right? big hike in the dividend, by 15 cents to 75 cents, up 25%. >> you have so many companies racing to pay special dividends or raise their dividends before the end of the year because the potential change in tax policy due to the fiscal cliff. >> and this one is payable on
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december 28th. what isn't clear to me is was it already payable on december 28th and they moved up the, or was it always paid on that date? it is a big move. take a look at shares of walt disney right now. 75 cents per share, higher by 15 cents, up from 60 cents per share. >> comes on the same day we heard of a dividend increase from costco. >> yep. >> you've had walmart, las vegas sands in the last 24 to 48 hours. so this tide of special dividend payments comes as the fiscal cliff woes. they're doing something with the money. john fortt has more breaking news on that ncr speculation we were talking about earlier that halted that stock and another. what do we know now? >> no longer speculation, scott. this company is doing mna with its cash and taking on some debt. ncr looking to buy retalix, it's an israeli company, for a total value of around $600 million, about $30 per share.
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included in that is just over $130 million that retalix has on the books. ncr says it's looking to do this with a combination of cash and debt. that's interesting because ncr's market cap is $1 billion. they're looking to add a little debt, use a little cash, and get this company, which has been doing quite well in software, for a point of sale, retail, other areas. it had been acquiring, expanding. ncr hoping to pick this up and fuel its growth into next year. >> all right, john. thank you so much. >> stick around. we're going to do more on today's big comeback market after the break. >> and as the clock ticks on the fiscal cliff, president obama is meeting behind those closed doors at the white house with a who's who list of ceos. >> a lot. >> our cameras are right outside the white house. we'll certainly keep you posted
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on the very latest developments there. >> up next, it's not just the mitt romneys of the world who will take a hit for higher tax rates on dividends next year. wait. you hear how widespread the pain will be felt among ordinary americans. later, save my 401(k). americans pour millions into these nest eggs because of tax benefits. someone here says those breaks could be chopped to cut the deficit. are those worries overblown? a heated debated is coming up. music is a universal language.
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let's get to mary thompson who has more on some of market action. >> more actually on all these companies paying out these dividends, michelle. consider this. last year only 44 members of the russell 3 o -- 3 000 had paid out a special dividend. why the rush? investors want to push out cash before the tax rates jump. take a look at these company names behind us. they're the one december clalar special dividends.
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on december 18th, a retail warehouse -- costco's payout, one of the ten largest out so far this quarter. in total, those ten firms distributing $9.4 billion to investors before the start of the new year. now, in addition to special one-time payouts, some firms are accelerating regular dividends so shareholders won't be hit with a higher tax bill next year. among those firms, walmart, ethan allen. in a note, citi says it's expecting more firms to pay a special dividend before year end. among the possible they named, best buy and walgreens. >> all right, mary. thanks so much. speaking of dividends, if these tacks go up because of any possible tax changes next year, warren buffett may not be the only one getting hurt. >> cnbc.com's senior writer jeff
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cox says ordinary americans would be impacted as well. jeff, what's at stake here? how can higher dividend rates hurd ordinary investors? >> how about if you own a blue chip stock? how about if you have a 401 k? in any of these cases, you could face direct or indirect hits from potential, as mary just pointed out, dividend tax rates. as i point out here, dividends aren't just for rich people. it's not just mitt romney and warren buffett. the damage is spread around. the downside risk to this is very steep, hearing a lot of talk about folks wanting to do some other things. diversification getting out of these dividend paying stocks and into things like corporate bonds and munis. forget about the fiscal cliff for now. the income cliff, if you're an investor who's living off of dividend income, senior citizen, whatever, you are a tremendous
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risk here. >> david, all you have to look at it the news we just brought you some 15 minutes ago. that disney is now raising the dividend payable december 28th. why? because it's a few days before the fiscal cliff. today, costco, walmart, las vegas sands, dil lards. the list goes on and on. it's been a tidal wave. it's important to everybody. that's why they're doing it. >> let me just correct a couple things jeff said. first of all, what president obama is proposing is to just raise those dividend taxes on people making over $it -- $200,000 or $250,000. the ordinary retiree is not going to be hit by this at all. that's one mistake. second, you have to keep in mind the last time we saw dividend tax rates go up in the tax reform after june, the stock market did nine. it did quite well during both
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those periods. one other thing to note is that if you have a 40 1(k) your dividends are not being taxed. you'd be exempt from this as well. >> jeff, weigh in. >> as far as a 401(k) goes, you're right in the sense you're not going to get a direct hit. i'm talking about an indirect hit. same thing if you're in an i.r.a. if you start to see an exodus from these dividend paying stocks and this goes back to the point before about why are they doing these dividend raises, it's because they're concerned about losing investors who are in these stocks specifically for the dividend. >> david, isn't that the point of the whole discussion? if this wasn't a serious issue and it didn't affect such a wide swath of people, why would these companies be racing to beat the deadline by issuing special dividends? >> it's nice for shareholders. i think all those early payouts are a massive gift to very
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wealthy shareholders. that's the popular thing to do. why not do it if they can legal do it? >> i reject that premise completely. hold on. these are corporate profits. when you own a share in a company, you're an owner of the company. the company pays taxes on their profits. then they distribute them. so when you tax a dividend, you're double taxing it. it's already been taxed once. >> right. so by that logic, let's get rid of all taxes on dividends so wealthy heirs basically pay no taxes. >> pension funds would be better off. everybody would be better off. >> look, one of the problems with these, you got to keep in mind, dividend tax rates right now are at a historically low level. they were much higher in the 1990s during that bull market. they were higher in the 1980s. >> not relevant to my point i was making. >> you're talking about completely different economic conditions as well. you're talking about a country that's scraping the bottom,
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coming from a recession, where any level of contraction is going to be damaging. >> jeff, we have to cut you off. bob is waiting. you know how he gets. guys, good discussion. thank you. >> all right. we started 100 points down. we finished 100 points up. bob, it's a fiscal cliff soap opeon on the -- opera on the street. >> we dropped about 10:00. we had disappointing october new home sales. that was one little disappointing piece of data. we rallied about 100 points after 10:00 p.m. john boehner, speaker of the house, said he's optimistic a deal could be done. we rallied another 70 or 80 points at noon as president obama said he was trying to make a deal on the fiscal cliff by christmas. that's what the market wants to hear, they want a date. then we had a little bit of move towards the close as we heard qe-4 may be coming at the next fed meeting. that would be no surprise. we've been talking about that
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for a while. take a look at housing stocks. they did not participate in the rally. unusually down beat news here from the october new home sales. september revised to the downside as well. i think the problem here is the inventory of new homes is very limited right now in a lot of parts of the country. that limited the up side. retail stocks had a good day. express had positive comments as well as american eagle. >> thank you, bob. labor making its voice heard on the fiscal cliff. we're going to speak with the head of the service employees international union, seiu. they're hot on protecting social security, medicare and medicaid from any cuts in the friscal cliff negotiations. >> ceos meeting with president obama at the white house. that pow wow kicking off within the hour. also ahead, this important story -- >> i plan to go to law school of a i graduated. looks like my folks won't have enough money to put me through college. >> well, the world needs ditch
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diggers too. >> student loan debt nears the $1 trillion mark. that's right. $1 trillion. new evidence college may not be worth it after all.
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rewards we put right back into our business. this is the only thing we've ever wanted to do and ink helps us do it. make your mark with ink from chase. another retailer declaring a special dividend. let's send it over to kayla for a quick market flash. >> that retailer is guess. that dividend came amid a lackluster quarter for the company. it beat on the top line but
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missed on the bottom line. it lowered guidance for next year and said store sales were down. look at the stock. up 3% after hours on $1.20 per share special dividend announced this quarter. investors like it. companies are doing it. >> we've seen a lot of these. >> just on that note, and, you know, i don't know if kayla is going to stay there or not, but a lot of companies are paying for the special dividends with debt. >> borrowing money. >> by borrowing money. we just mentioned how costco was one of these companies, another retailer, to kayla's point, that's issuing a special dividend. they're now announcing a debt offering as a result. >> money is so cheap. you borrow it and give it to your shareholders in an effort to boost your stock. >> not the last that we're going see. >> a perfect example of how we insent vi insent vise debt in america. ceos will be meeting with
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president obama. >> mary kay henry is president of the service employees international union. she's been on capitol hill imploring lawmakers to focus on tax issues now and spending issues later. it's great to have you on the show. welcome. >> thank you, scott. glad to be here. >> are you guys willing to put so-called entitlements on the table? can we put those on the table, social security, medicare, all of these things that need to be dealt with? >> scott, they were on the table a year ago. $1 trillion of cuts have already been made to those programs. we think the top priority is to have the wealthiest pay their fair share and get jobs created so we can spur the economic recovery. >> okay. let's pretend you got that tomorrow. republicans say, that's it, we're going to get it done. we're going to raise taxes on the upper income individuals. then could we reform medicare? >> well, if we get this country
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back to work, there is a lot of room to have a conversation about how it improve the delivery of health care, but we have millions of workers that are in jobs that don't provide any health care coverage. >> i didn't get a good answer. >> at what point would you be willing to put it on the table? does the unemployment rate have to fall to 7%, 6.5%? at what point can we have a serious discussion about entitlement in this country? >> we've been having a serious discussion because cuts have happened to these programs over an over while the bush tax cuts have been in effect. $1 trillion has been taken off the table for the last eight years. i don't think it's too much to ask for the wealthiest americans to pay their fair share to get the economy going again so we can restore the american middle class and get people back to work. >> why not tell wealthy seniors there's going to be means testing in medicare and there's going to be means testing in social security? if you have $1 million in the bank, you can't have social security. that would be raising taxes on the wealthy.
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how about that? >> i think those are valid conversations, but what i'm trying to argue is that it should not be connected to this conversation about -- >> okay. i disconnected it. we're going to go to the land of make believe. we've raised taxes on the people you want to raise taxes on. would you be willing to means test social security and medicare in order to bend the cost curve? >> i think we have to have a large conversation -- >> that's no. that's an evasive answer. >> i agree. i'm not willing to have that conversation until we get this country back to work, grow the economy from the middle out, put people's money in people's pockets so we can restore the robust economic recovery that this nation deserves. >> you're not willing to rise above, as we've been saying here around cnbc, beyond your own self-interest and those of the union that you represent. >> and very wealthy people. wealthy, wealthy individuals and seniors who can afford a lot more. >> no, this is about a national conversation where we just had a year long presidential debate on
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the -- >> but there's a nation willing to have a conversation. you're not even willing to put entitlements on the table. doesn't everything need to be on the table? it's a shared sacrifice. >> i don't think this is the right conversation because 23 million people are out of work. workers' wages have not been raised in real dollars for the last 30 years in this economy. the only jobs being created are low-wage, minimum-wage jobs without benefits or guaranteed hours. >> i think this is so strange. this is so strange. ma'am, we have billionaires on cnbc all the time. they tell us they get a social security check. they use medicare. and you can't even tell me that those people shouldn't have access to those benefits. we can't even cut off millionaires. but you're going to raise taxes. >> here's what we said when we created social security. that we wanted a minimum in this country and guaranteed social
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insurance program that has been turned into a notion that somehow it's some entitlement as opposed to a guarantee of the basic common good in this country. so, no, i am not willing to connect the question of medicare, medicaid, and social security to a conversation that this nation has been delaying for too long, which is how are we all in this together? how does everybody pay their fair share? and how do we restore economic recovery by getting people back to work in jobs they can feed their families on? >> ms. henry, thank you so much for joining us. >> thank you. >> she's not rising above. i think that was a good observation on your part. >> is anybody? >> no. will your 4011 k go over the fiscal cliff? a trade group in washington warns that 4011 -- 401(k) tax benefits may get cut. later -- >> we've encouraged them to go to college. at least try a semester, full
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year. >> well, a lot of parents feel the same way as this college dad. with tuition soaring and student loan debt near $1 trillion, is college still worth the cost? we'll talk bang for your college buck in the back half of the show. and as powerball players rev up for tonight's $550 million drawing, states are making millions in the process. should those hit hardest by hurricane sandy set money aside to help hurricane victims? stick around. having you ship my gifts couldn't be easier. well, having a ton of locations doesn't hurt. and a santa to boot! [ chuckles ] right, baby. oh, sir. that is a customer. oh...sorry about that. [ male announcer ] break from the holiday stress. fedex office. and his new boss told him two things -- cook what you love, and save your money. joe doesn't know it yet, but he'll work his way up from busser to waiter to chef before opening a restaurant specializing in fish and game from the great northwest.
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glnchts there's a shot of the white house. the meeting between president obama and efrl of the nation's ceos set to begin momentarily, about ten minutes away. you have the ceos today of goldman sachs, caterpillar, our boss at comcast, marriott, and many other top executives there. we saw jimmy lee earlier there. >> all of them trying to rise above. >> well, they're rising above. it's unfortunately, many of the people they're visiting with aren't. >> exactly. >> we need to get a boat load of
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pins to our elected officials. there it is. 60 million american workers covered by a 401(k) or similar retirement plan. brian warns that the tax benefits that go along with those plans could be on the chopping block in the tax debate brewing in washington. that will severely curb retirement savings. >> but financialed a vie or natalie pace says these are concerns that are being way overblown. both join us now. make your case, natalie. why are they being overblown in. >> the only discussion i've heard of is in the ways and means committee. the republican chairman said he wants to simplify it, make it more efficient, and also get more contributions, not less. so i haven't heard anybody saying they need to chop the 40 k. in fact, i wish the power of this organization and this website would be protecting our 40 -- 40 1 k.
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>> brian, are you overdoing it? >> absolutely not. the simpson/bowles plan cuts contributions. the last time they did tax reform, they cut the limit by 71%. all of these proposals like capping deductions, like limiting the tax benefits associated with these plans, all of them impact 40 k plans. the president's budget proposal caps the benefits at 28%. it's in the budget. >> people would not be able to put away as much as they had before the minute you can put stuff in, that's money that can't be taxed. that's revenue that doesn't go to the government. but of course, you as the individual suffer. that's your point. >> that's exactly the point. the problem is if they take these incentives away, people are not going to save. in fact, research shows that the lowest income quartile that's most sensitive to the tax break, they won't save as much. >> natalie, let's say this does
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happen. what would be the fallout? would people save less? would plans shrink in. >> that sounds like a very iffy proposition. the basic fact is that we have to get this budget passed before the end of the year. tax reform of the nature that would be required to reform our entire system would require too much debate to get it done. so i think this iffy proposition is something that is really diverting away from the true reform that is needed right now. again, i really wish the power of this website was saving it from what's really happening, which is people are draining it to try to pay off debt. that's a serious issue. that is something that we should be addressing. congress is not going to happen before the end of the year. that's when the deal has to be done by. >> but the spirit of scott's question was, if it does happen, wouldn't it be negative for savings rates? it would disincentivize people to save, wouldn't it? >> yeah, but i'm not hearing anything that it's going to
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happen. again, what's going on in the ways and mean the committee is they want to simplify the process, make it more efficient, and encourage more contributions, not less. so this will be a battle, perhaps, but it won't be a battle this year. i'm not hearing anybody say that's what they want, and they had white house support. this is bipartisan support to make it easier, more efficient, and more contributions. >> got it. thank you, guys. all right. when the president invites you to meet at the white house, you go, right? goldman sachs lloyd blankfein among the ceos in attendance. we're monitoring it. keep it here. and $1 trillion. that's how much student loan debt has risen to. is a college degree really worth it? we'll discuss that next. plus, there's more than one winner in tonight's powerball drawing. states are guaranteed to make tens of millions just from the sales of the tickets. but are they using the money for
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the right thing? >> you sounded like that mike myers character there. time to toast today's close with this. foot traffic in retail sales were both higher during this four-day thanksgiving break. the average amount spent per day for the entire week is down. in 2011, consumers reported spending $83 per day on average, according to gallop.com. so how much did they spend this year? find out next. or that printing in color had to cost a fortune. nobody said an all-in-one had to be bulky.
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♪ ...could end with adding a close friend. ♪ the lexus december to remember sales event is on, offering some of our best values of the year. tis the pursuit of perfection. when we got married. i had three kids. and she became the full time mother of three. it was soccer, and ballet, and cheerleading, and baseball. those years were crazy. so, as we go into this next phase, you know, a big part of it for us is that there isn't anything on the schedule.
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a toast to today's market close. how much did consumers spend during thanksgiving week this year? an average of $67 per day. that's down from 2011 and 2010 and even lower than the average amount spent in 2009. who do we see arriving? oh, our boss just arrived at the white house. brian roberts, the ceo of comcast. rising above, meeting with the president to give encouraging
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words about solving the fiscal cliff. >> several of the nation's top ceos at the white house today to meet with president obama. that's the ceo of yahoo! of course. frank blake of home depot is there. >> how did you know it was her before you saw her face? >> i'm just that good. >> you're just that good? there's not many blond female ceos walking into the white house. >> i may have been tipped off. i may. not only am they good, our control room is even better. >> all right. close to $1 trillion. that's how much this country has in outstanding student loan debt right now. plus, a record number of people are falling behind on their student loan payments. for the first time, student loans 90 days overdue surpassed credit card debt in the third quarter. >> so this raises the question, especially in today's job market, is it all really worth it? especially since taxpayers are on the hook for the loans if they default. neil mccluskey says there's an
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overemphasis on a college degree. he joins us along with our own scott cohn. guys, good to have you. neil, look, i don't know. it would be great to be the next mark zuckerberg. i think we'd all love to be that. an overemphasis on a college degree, i don't know about that. >> well, there are two big numbers you need to know. first, about half, about 50% of people who go to college never finish. many of them are going to take out loans. they're going because they're told everyone needs to go to college whether they're right for it or not. those people are being sold a bill and taxpayers are on the hook for their loans and federal grants. and one-third of people with bachelor's degrees earn jobs that don't require that degree. that shows huge swaths of americans already consumer college that they don't need and that doesn't pay off for them. >> scott, you're not surprised by these numbers, right? you did a documentary about what we thought would be the coming crisis in student loan debt. it's arriving, isn't it?
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>> it had arrived. two years ago we did this documentary. we had a lot of the same issues. the delinquencies and the question of whether college is worth it. i want to show you a clip from our documentary "price of admissi admission." we talked to people who have been mired in student debt and their per spigspectives on the college education they borrowed for. nick and emily with a quarter of a million dollars between them in student debt. kyle mccarthy with more than $70,000 in student debt. listen to what they had to say about college in retrospect. >> you don't have to go to college. >> work for a year. >> find out what you want to do. >> don't discover yourself in college and pay all this money. >> by no means am i saying don't go to college. that's not what i'm saying at all. people have to be aware of what they're getting themselves into. >> i mean, pretty much anybody can take out a student loan, and they don't know what they're getting into. at the time, they didn't know
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what kind of job market they were getting into. nick and emily both did find jobs. now they're paying back those loans. kyle found a better job. he's still in debt. now he's working as an activist trying to get reforms in student loan system. >> neil, the bottom line, i guess, to this whole thing is college is probably just too expensive at the end of the day. >> yeah, and college is too expensive because primarily the federal government will give almost anyone limitless amounts of money to go to college, regardless of their demonstrated academic ability or desire. >> that's not exactly right. >> colleges raise their prices at great speeds, far in excess of health care. >> that's not exactly right that anybody can get money to go to college regardless. you can't just -- the borrowing is an issue, clearly. people can get loans without underwriting. one of the main issues that is causing college tuition to go up is that state aid is decreasing, so they have to rely more on
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tuition. and there's this whole issue of demand. everybody thinks that they need a college degree. >> scott, we got to run. i have to ask you a quick question. as the unemployment remains high, and we have such a jobs crisis in this country, are we at risk of more defaults on student loans, a real bursting of a bubble? >> we're at risk of more defaults. we're at risk of a whole generation of people that should be at their greatest earning power, being burdened by these student loans. the good issue for the taxpayers is that you can't walk away from a student loan the way you can from a mortgage. so people will ultimately have to pay these back. >> yeah, it's the only thing you can't get out of no matter what. all right. thank you, guys. coming up next, should new york and new jersey fork over some of the proceeds from tonight's $550 million powerball lottery to help hurricane sandy victims? >> we're going to talk about that on the other side of the break. keep it here. if we want to impe our schools... ... what should we invest in? maybe new buildings?
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what about updated equipment? they can help, but recent research shows... ... nothing transforms schools like investing in advanced teacher education. let's build a strong foundation. let's invest in our teachers so they can inspire our students. let's solve this.
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power ball frenzy sweeping the nation as the jackpot hits $550 million. nbc's jay gray is in dallas where the tickets are being at a fast and furious pace. jay? >> reporter: yeah, we're at fuel city where they sell a ton of gas. they have great tacos here. they sell a lot of other things
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too. as you can see the big ticket item today obviously has been those tickets. first you have the group that came in before work this morning, then the lunchtime crowd came in, now we're getting a bit of lull before the end of work group makes their way through to buy tickets. and we expect this place to be jam packed like it has been throughout the day today. they are selling at a fast pace, not only here in dallas, but across the country, a lot of work going on, and right now the "associated press" just reporting the rate of sales is 130,000 tickets every minute right now. they've already sold more than $1 billion worth of tickets. you know, that $1 out of every $2 that is spent on a ticket goes to the state selling that ticket. a lot of states obviously use that to fund programs including education here in texas and some other programs. i hate to say this because there are some -- a few hours left to buy tickets, unfortunately, i have it on good word that the winning ticket has been sold here in texas, michelle. so --
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>> yeah, you're holding it in your hand right now. i can see those numbers. that's right. thank you, jay. >> a former reporter, jay gray. >> that's right. >> his last live shot. >> did you know that no matter who wins the power ballotry, all participating states are winners? for every $2 spent on a power ball ticket, $1 goes to the state. and the state of the eventual winner will get a windfall if they have an income tax. what is that ticket is sold in new jersey or new york? the two hardest hit states from hurricane sandy. should they amend the windfall to cover the costs? >> texas doesn't have a state income tax, by the way. just to play off jay gray's story. katherine thinks it's a good idea. katherine, to play off "reason" magazine, that seems reasonable, huh? >> the dirty secret of the lottery is the winner is always the state governments, getting this huge amount of revenue. i actually think, you know, right now new york and a lot of
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other states, the money they get from lotteries goes to education. and you might say, oh, it's a tough call, teachers or hurricane victims, but in the last three decades, we've doubled education spending on a national level and we don't have much to show for it test scores wise. i think let's take some of that cash from the teachers, give it to the hurricane victims where it can do a little more good. >> maybe there should be special exemptions at times like these where you have new york and new jersey where the cost of the hurricane is going to rise, i don't know, what $20 billion, i think -- or at least near that is what at least in new york city what the cost could be. >> sure, and, you know, frankly there's something that i always find a little bit -- a little iffy about the lottery, which is that the people who play by and large are on the lower end of the income scale. poor people pay the lottery more, but that money goes to fund services people in the middle class like education. it actually seems to me like a little bit of a better outcome if we are going to assume that still poor people are buying a
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lot of these lottery tickets. >> don't a lot of these states, though, the way they sell a lottery in the first place is don't worry all the money's going for education. of course, people don't realize money's fundable, so they take from somewhere else. it doesn't increase the amount on education, but don't a lot of states have in the constitution, change the constitution in order to achieve what you want to do, right? >> that's true. and you're right to say this notion that somehow lottery money is like magical and can only go to education and it's insulated from the rest of the state budget is pretty artificial. but, you know, that said, i think in times of national crisiseven crisis, there often is kind of enough will to do major legislative initiatives or to amend the constitution, and if new york and energy want to do that, great. >> i like "reason" magazine a lot. >> me too. they seem very reasonable. call them fiscal cliff
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spikes and dives, will the market swings continue tomorrow morning? we've got three top money pros to weigh in next. and we're keeping an eye on the closed-door meeting at the white house between president obama and ceos to tackle the fiscal cliff. there's a look at the white house right there live as you're watching cnbc first in business worldwide. at optionsxpress we're all about options trading. we create easy-to-use, powerful trading tools for all. look at these streaming charts! they're totally customizable and they let you visualize what might happen next. that's genius! we knew you needed a platform that could really help you elevate your trading. so we built it. chances of making this? it's a lot easier to find out if a trade is potentially profitable. just use our trade & probability calculator and there it is. for all the reasons you trade options - from income to risk management to diversification - you'll have the tools to get it done. strategies. chains. positions. we put 'em all on one screen! could we make placing a trade any easier? mmmm...could we? around here, options are everything. yes mom, i'll place a long call to you tomorrow.
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market up 100 points today, what's going to happen tomorrow? our next guests are here to tell us what will move the markets. >> with us today, sandy villary. ed, you're first, 30 seconds, go. >> great, tomorrow going to be looking at oil prices. we'd like to see oil prices continue to head lower. you know, last week the fighting in the middle east did not send oil prices skyrocketing, which to us was a clear indication that supply was in control. we would've seen a much more severe reaction if supply was tight. in oil prices, when they go lower, it's a negative to the market right away because so many energy companies make up the s&p 500. but in the long run, it's very good for corporate america, corporate earnings, and the global economy, as well. >> and for my gas tank, as well. sandy, you've got 30 seconds.
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>> yeah, tomorrow, we're going to be watching gdp numbers, revised gdp of 2.8%. mostly watching dallas fed president fisher who is going to talk about the fiscal challenges in the u.s. and abroad. you look at yesterday, harry reid opens his mouth, no deal done and market falls 80, today boehner comes out saying that tax revenue is on the table and here we are up 100 points. i'll be buying good quality growth companies that any fallback from the fiscal cliff and i'm going to be buying. >> your 30 seconds starts now. >> yeah, well, today the s&p 500 tested the 200-day moving average. as we close out the month of november. we've seen relative strength in small cap stocks over large cap stocks. we're looking for that relationship to hold up, as well. and tomorrow we'll be looking at the growth number, which of course, consensus will expect an increase. we don't think it'll be a game changer because of the head winds such as the fiscal cliff, but we think it'll contribute to optimism about the economy. >> you're in a

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